Money on the markets

How to rate the budget?

When the finance minister presents the budget, the stock market moves one way or the other.

And like every year this will dominate the news.

Over there and everywhere.

Is that fair? Or convincing?

Some of the analysis will follow a pattern.

If the stock market goes up, the budget may be described as successful because it didn’t “rock the boat”.

If  it moves sideways, it may be said the market had already absorbed the good news — the growth figures for instance.

Should we have a separate railway budget?

A railway budget separate from the general budget started in 1924 because the railways then formed more than a third of the budget.

A dedicated budget for railways was called for.

However the pattern of government’s finances has changed and the railways despite the impressive statistics - 63,327-kilometre network, 18 million passengers,  two million tons of freight – is less important.

Although being the largest state-run enterprise, the immense power of patronage it embodies makes it politically very lucrative.

In the coalition era, the ministry has always gone to an ally with considerable political heft.

But does that justify a separate budget and what some say is political grandstanding by whoever be the reigning railway minister?

Commentators have called for abolishing the practice of having a separate railway budget.

Sensex drops over 1400 pts over the week

After the stock market’s thumbs down to the budget on Monday, the weakness continued all week with the Sensex registering a drop of over 1400 points in five sessions.

On Friday the benchmark closed 253 points lower at 13,504 on worries over the monsoon and global economy.

Reliance Industries led the fall, dropping nearly 4 percent, whereas losses in HDFC, SBI and L&T also pushed the benchmark lower.

Infosys shares gained nearly 3 percent after it declared better than expected Q1 numbers.

Gains in Infosys helped the BSE Info Tech index gain over 2 percent, but all other sectors closed in the red.

The oil & gas index was the worst hit, with losses of 3.2 percent. Indices for power, capital goods and  realty shed over 2 percent each.

It has been a bad week for the stock market with the Sensex posting its worst weekly drop in 2009. Do you think the uncertainties will continue, pulling the market further down?

Sensex tanks on global economic worries

Selling pressure pulled the BSE Sensex below 14,000 on Wednesday as concerns over global economic recovery spooked financial markets all around.

Trade was volatile and the 30-share sensitive index touched an intra-day low of 13,701 before closing 401 points lower at 13,769. The fifty-share Nifty ended 2.93 percent down at 4,078.

The fall in the benchmark was led by L&T, ICICI Bank, Reliance Industries and HDFC Bank.

On the sectoral front, the BSE Realty Index dropped 8.47 percent, followed by the Capital Goods Index which ended 5.05 percent lower. All other indices ended in the red.

On the global front, Asian and European markets felt the selling heat as investors pulled funds out of bets on the global economic recovery.

Doubts about the strength of the global economy saw oil prices falling more that a dollar. Do you think the Sensex fall is a sign of a downtrend setting in, or is it a correction that will see the benchmark scaling new heights?

Sensex rises in choppy trade

The BSE Sensex ended 0.9 percent up on Tuesday, recovering from yesterday’s biggest one-day drop in six months.

The benchmark turned negative during trade after rising more than 1 percent, as a large budget deficit weighed on investors’ minds. Trade was volatile and the 30-share sensitive index swung from an intra-day low of 14,000 to an intra-day high of 14,252 and closed 127 points higher at 14,170.

The fifty-share Nifty ended 0.87 percent up at 4,202.

The rise in the benchmark was led by ITC, L&T, ICICI Bank and Bharti Airtel.

On the sectoral front, the BSE Auto Index gained 3.92 percent, followed by the FMCG Index which ended 3.83 percent higher. However, the BSE Oil & Gas Index closed 1.32 percent lower.

On the global front, Asian and European markets ended lower as investors remained nervous ahead of upcoming second-quarter results.

Do you think the Sensex will recover and touch 15000 levels again?

Market slides as budget disappoints

The Sensex plunged 5.8 percent on Monday as the higher-than-expected fiscal deficit announced by the government in the Union budget disappointed investors.

The 30-share sensitive index swung from an intra-day high of 15,097 to an intra-day low of 13,959 and closed 870 points lower at 14,043. The fifty-share Nifty ended 5.84 percent down at 4,165.

The fall in the benchmark was led by Reliance industries, ICICI Bank, L&T and HDFC.

On the sectoral front, the BSE Banking Index dropped 8.1 percent, followed by the Realty Index which ended 7.2 percent lower. However, the BSE FMCG Index closed 0.97 percent higher.

Reliance Infra was the benchmark’s biggest loser with the stock plunging over 12 per cent. The other big losers were ICICI Bank, JP Associates and Tata Steel, all down over 9 per cent.

The budget fell short of investor expectation as it did not include any significant policy changes. The populist budget instead focused heavily on increased borrowing and spending to aid farmers and the poor, pushing the fiscal deficit for the year ending March 2010 to a higher-than-expected 6.8 percent of GDP.

Do you think the government could have introduced more market-friendly reforms to boost investor sentiments?

Market jumps over 250 points before budget

The Sensex jumped 254 points on Friday as investors covered short positions ahead of the full year’s budget which is to be announced on Monday.

The rally in the benchmark, which closed at 14,913, was led by HDFC (up  7.7 percent). Gains in Tata Steel, M&M and Reliance Infrastructure also helped.

Banking stocks were the top performers, with PNB, Oriental Bank, Union Bank and ICICI gaining over 3 percent each. All sectoral indices closed positive.

Reliance Natural was the top traded counter on the BSE, gaining nearly 7 percent. Suzlon Energy, Ispat Industries and Satyam were among the other top traded stocks.

Shares in railway operators gained after Railways Minister Mamata Banerjee announced in the budget that private operations of freight terminals would be encouraged. Shares in Container Corp of India ended up 4 percent. (Click here for complete coverage).

All eyes are now on what Finance Minster Pranab Mukherjee will announce on Monday. Where do you see the market next week?

Market ends flat, no cues from economic survey

The Sensex ended just 13 points higher at 14,658 after a volatile session as investors awaited budget announcements next week.

The government released the economic survey report on Thursday which said India could see growth of around 7 percent this year if it makes sweeping reforms and speeds infrastructure development. (Click here for complete coverage)

Shares in Reliance Industries and Bharti Airtel fell over 2 percent each.

ONGC shares jumped 7 percent after the government raised fuel prices on Wednesday, a move that could ease the subsidy burden on oil firms. ONGC was also the top index gainer.

Metal stocks did well in trade leading to an over 3 percent jump in the BSE Metal Index. Tata Steel, JSL Ltd, SAIL and Sterlite Industries posted gains.

BSE capital goods, auto and banking indices were on the losing side.

The markets did not react much to the economic survey and the focus remains on the July 6 Budget.

Markets gain 1 pct in volatile trade

The benchmark managed to close 1 percent up in volatile trade as investors awaited cues from the approaching budget.

Reliance Industries, Bharti Airtel and SBI led the rise, whereas DLF, M&M and Reliance Infra ended as the top index gainers.

The realty index jumped over 4 percent with Indiabulls Real Estate gaining 7.2 percent and DLF adding 4.7 percent. The banking index gained 1.3 percent and the auto index ended 1.2 percent higher.

NIIT (up 14.6 percent) and Educomp Solutions (up 12 percent) were among some of the mid-cap counters that rallied.

On the economic front, India’s manufacturing activity expanded for a third straight month in June, but at a slightly slower pace. Data released showed exports fell an annual 29.2 percent and imports dropped 39.2 percent in May.

With investors cautious ahead of the budget announcements, do you think we can cross the 15,000 mark before the week ends?

Sensex drops 292 points

In pre-budget pessimism, investors booked profits on Tuesday shaving nearly 300 points off the benchmark.

The Sensex closed 1.97 pct down at 14,494, while the Nifty slipped 100 points to 4,291.

Losses in stocks like Reliance Industries, ICICI Bank and L&T weighed on the benchmark.

Top listed realty firm DLF dropped over 8 percent to end as the top Sensex loser, followed by Tata Motors which fell 7.2 percent.

Realty stocks took a beating in trade with their sectoral index slipping 7.4 percent. HDIL dropped over 12 percent, while Unitech was down 6.6 percent.

All other sectors succumbed to pressure and ended in the red with the metals, power and capital goods indices slipping over 3 percent each.

Suzlon Energy ended down over 11 percent to close at 103.7 rupees. It was the second most traded stock on the BSE.